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Why it matters: U.S.-China standoff over South China Sea

China's militarization of the South China Sea was at the top of Defense Secretary James Mattis' agenda on his trip to Beijing this week, and Chinese state media reports President Xi Jinping told him China will not give up "any inch of territory passed down from ancestors."

Why it matters: The sea is a critical component of China's plan to build a military proportional to its economic power. Beijing has no intention of giving up its claim, while the U.S. has no intention of accepting it.

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There are two conflicts defining the South China Sea dispute, Dennis Wilder, the National Security Council's Senior Director for East Asia under George W. Bush, tells Axios:

China's artificial islands: Over the past four years, China has built a series of artificial islands in the South China Sea, and turned them into airfields and naval ports. "It's breathtaking what the Chinese have done out there," says Wilder. "There's nothing like it anywhere else in the world."

Freedom of navigation: The U.S. vital interest in the region is to maintain the ability to sail commercial and naval ships through the waters, which China claims as its own with its "nine-dash line." A third of the world's trade, worth about $3.4 trillion, passes through the South China Sea every year.

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In 2016, Xi stood in the Rose Garden next to President Obama and said China would not militarize the South China Sea. He did it anyways. "That part of the game is over," Wilder says.

The big reason the U.S. doesn't step in on the issue of artificial islands is that, unlike Malaysia, Brunei, Indonesia, the Philippines and Vietnam, it doesn't have claim over the territories China is grabbing, says Wilder. The U.S. does back these countries diplomatically, and urges them to stand up to Beijing.

Yes, but: "They're scared to stake their claims because they don't know that [the U.S.] would actually go to war for them over this issue," he says.

"From Beijing, the South China Sea looks as Chinese as the Caribbean looked American to Teddy Roosevelt," says Graham Allison, a Harvard professor who was assistant secretary of defense in the Clinton administration.

But the U.S. is maintaining its commitment to freedom of navigation by periodically sailing navy ships within 12 nautical miles of the islands China claims as its own — a move that China calls "American militarization" of the Sea.

Where things stand

Mattis said only that his meetings in Beijing were positive. However, Wilder says, "I'm sure in the private discussions with the Chinese he was as clear as he has been publicly on other occasions."

The bottom line, per Allison: "Beneath the noise about the South China Sea, the growing Chinese military, and the trade conflict is an underlying Thucydidean dynamic. Rising power threatening to displace ruling power. That’s the dominant storyline — rest is details."